126 ITV plc Annual Report and Accounts 2023 ITV plc Annual Report and Accounts 2023 127 REMUNERATION REPORT CONTINUED G O VE R NAN In accordance with the terms of the relevant incentive plans rules, the Committee retains discretion to determine the treatment of any Impact of share price C The value of Restricted Shares will fluctuate based on the share price over the relevant vesting period. For example, if the share price outstanding awards held by a departing Executive Director. The appropriate treatment will vary depending on the relevant facts and E increased by 50% over the relevant vesting and holding period, the maximum values shown in the charts above would increase to £5.1 million circumstances at the time. The table below sets out the general position and range of approaches in respect of incentive arrangements. for Carolyn McCall and to £3.3 million for Chris Kennedy. Conversely if the share price was to fall by 50%, the maximum values shown in the charts above would reduce to £3.7 million for Carolyn McCall and to £2.5 million for Chris Kennedy. Plan Good leaver (e.g. ill health) Bad leaver (e.g. dismissed for cause) Change of control Recruitment remuneration Bonus Executive Directors may be eligible for a Awards lapse. Awards would normally continue unless When agreeing the components of a remuneration package for a new Executive Director, the Committee will apply the principles bonus award prorated to reflect the the Committee determined otherwise. detailed below. proportion of the financial year for which they were employed and subject to the performance achieved, normally provided The package will be competitive to attract and retain the most suitable candidate for the job. Where possible, the Committee will always seek they have a minimum of three months’ to align the remuneration package with the Policy outlined above. However, where appropriate, detailed elements of the package may be service in that bonus year. tailored to the circumstances of the individual upon recruitment. The Committee will ensure that the arrangements are in the best interests of both ITV and its shareholders and remain subject to the overall variable pay limits set out below. DSA Injury, ill health, disability or transfer of Awards lapse. Awards release in full at effective date undertakings. Awards release in full at the of change. Ongoing remuneration In determining an appropriate remuneration structure and levels, the Committee will take into account all relevant factors to leaving date. ensure that ITV is able to recruit the most appropriate candidate for the job and that the arrangements are in the best interests of both ITV and its shareholders. The Committee will typically seek to align the ongoing remuneration package with For other good leavers identified by the the ongoing Policy outlined in this Report. Committee, awards release at the end of the deferral period unless the Committee Fixed pay will be determined in line with the policy table in this Report. The Committee may also hire a new Executive Director decides to release the shares earlier. at a lower salary, with more significant increases to salary being awarded as the individual gains experience. The maximum level of variable remuneration which may be granted to a new director upon appointment (excluding any Restricted Shares Awards are typically prorated for time Awards lapse. Outstanding awards would normally vest buyout awards for forfeited remuneration) will be capped in line with the Policy table above. Within the limits of the Policy during the served (where departure occurs during and be released subject to satisfaction of table the Committee may also rebalance the relative weighting of fixed pay and variable pay elements to reflect the performance period the first three years) and vest subject to performance underpins and capped circumstances on appointment. satisfaction of performance underpins. based on the time elapsed since grant, Buyout awards for The Committee may make awards to ‘buyout’ a candidate’s remuneration arrangements that are forfeited as a result of Awards are released at the end of holding subject to the discretion of the forfeited remuneration joining the Company. period unless the Committee decides to Committee. In doing so, the Committee will take account of relevant factors, including any performance conditions attaching to forfeited release the shares earlier. awards, the likelihood of the awards vesting and the form and timing of the awards. The Committee will typically seek to make buyout awards on a comparable basis to those that have been forfeited but, particularly where the performance period Restricted Shares Awards are released at end of holding Awards are normally retained, and are Awards are released at the effective date is substantially complete, may reflect such conditions in some other way, such as through an appropriate discount to the face – during the period unless the Committee decides to released at end of holding period unless of change. value of awards forfeited. Exceptionally, where necessary, this may include a guaranteed or non-prorated annual bonus in additional holding release the shares earlier. the Committee decides to release the the year of joining. period shares earlier. In exceptional circumstances, the Committee may grant a buyout award under a structure not included in the Policy but that In the case of misconduct, awards will is consistent with the principles set out above (and may rely upon Listing Rule 9.4.2 in structuring such a buyout). lapse. The Committee will take all relevant factors into account (including the candidate’s location, the calibre of the individual, external influences, internal relativities and the overall business context) when determining the new remuneration package and seek to ensure that no more is paid External appointments than necessary. With specific prior approval of the Board, Executive Directors may normally undertake one external appointment as a non-executive director In the Remuneration Report following the appointment, the Committee will fully explain to shareholders the remuneration package for the of another publicly quoted company and retain any related fees or share awards paid to them for their services. appointed individual and the rationale for such arrangements. Non-executive Directors On the appointment of a new Non-executive Chair or Non-executive Director, the terms and fees will normally be consistent with the fee policy The table below summarises the main elements of remuneration for Non-executive Directors. outlined in the Policy. Service contracts and loss of office Component Operation Maximum potential payment Executive Directors Non-executive Director fees The Committee determines the fees of the Non-executive The aggregate fees of the Chair and Non-executive Chair. The Chair and the Executive Directors determine the Directors will not exceed the limit from time to time Executive Directors have rolling service contracts that provide for 12 months’ notice on either side. For a new joiner, the contract may fees of the Non-executive Directors, which are accepted by prescribed within the Company’s Articles of Association commence with a notice period of up to two years reducing to the standard 12 months over time. There are no special provisions that apply the Board. (currently £1,500,000 p.a.). The value of benefits (including in the event of a change of control. Service contracts are available for inspection at the Company’s registered office. The fees are set at a level that is considered to be the reimbursement of travel and other expenses, and appropriate, taking into account the size and complexity of associated taxes) provided will be reasonable in the market A payment in lieu of notice, including base salary, benefits and retirement benefits may be made in certain circumstances, including if: the business and the expected time commitment and context and take account of the individual circumstances contribution of the role. and requirements of the Company. • The Company terminates the employment of the executive with immediate effect, or without due notice • Or termination is agreed by mutual consent Additional fees may be payable for membership and/or chair of a committee or other additional responsibilities. Service contracts normally include clauses requiring departing directors to mitigate losses from termination, balancing the commercial Non-executive Directors are not entitled to any circumstances at the time (e.g. impact on non-compete/non-solicitation clauses, protection of intellectual property). performance-related pay or pension. Role-appropriate benefits may also be provided in certain Where appropriate, the Company may also provide benefits in connection with departure which may include making a payment in respect of circumstances. This includes the reimbursement of any outplacement costs, legal fees and the cost of any settlement agreement. travel expenses (and associated tax on those expenses). With the exception of termination for cause, Executive Directors may be eligible for a bonus award prorated to reflect the proportion of the financial year for which they were employed and subject to the performance achieved, normally provided they have a minimum of three months’ service in that bonus year.